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Interest only mortgages

If your mortgage is interest only or part of it is interest only, it's important to check your repayment plan is on track to pay off the amount you borrowed at the end of the mortgage term.

How interest only mortgages work

With an interest only mortgage, the monthly payments only cover the interest on the money you’ve borrowed. This means that the amount you borrowed (sometimes called capital) doesn’t reduce and you’ll need to repay it all at the end of your mortgage term.

For example:

If you have an interest only mortgage of £100,000 for 25 years, you will only pay the interest on the loan each month and at the end of the 25 years, you will still owe the full £100,000.

If you want to update us or need a little help

You can keep us up to date with your plans or ask us to contact you by filling out our interest only assessment form.

If you’re worried you might not have enough at the end of your mortgage term to pay the balance off you have some options open to you.

1. Making overpayments

If you can pay more each month, this would help to reduce the amount you owe and reduce the amount of interest you would have to pay back.

You can either pay more each month or as a lump sum. Early Repayment Charges may apply, please refer to your mortgage offer for details.

2. Change to a repayment or part repayment mortgage

You may be able to change from an interest only mortgage to a repayment mortgage, which means you will pay back the amount you borrowed and interest. Or to a part repayment mortgage, which means you will pay back part of the amount you borrowed and interest.

3. Changing repayment method and extending your mortgage term

To make changing to a repayment or part repayment mortgage more affordable, you could consider increasing your mortgage term. This would give you more time to repay your mortgage.

Any changes will be subject to your existing mortgage terms and conditions and our current lending policy. Please refer to your original mortgage offer for details or contact us.